Robert Reich: Who’s Most Responsible For The Monopolization Of America? – OpEd


One of the most important initiatives of the Biden administration is its attack on corporate monopolies. 

The Justice Department’s case against Google goes to trial. The Department alleges that Google illegally abused its power over online searchto throttle competition. It is the government’s first monopoly trial of the modern internet era.

Later this month, the Federal Trade Commission (FTC) will file its lawsuit against Amazon, alleging that Amazon favors its own products over competitors’ on its platforms and uses predatory tactics with outside sellers on 

Whether it’s Ticketmaster and Live Nation consolidating control over live performances, Kroger and Albertsons dominating the grocery market, or Amazon and Google scooping up every operation in sight, corporate concentration is on the rise. 

Over the past several decades, giant corporations have come to dominate most American industries, as this chart shows:

Source: “100 Years of Rising Corporate Concentration” by Spencer Y. Kwon, Yueran Ma, Kaspar Zimmermann

The social costs of corporate concentration are growing. 

— The typical American household is paying more than $5,000 a yearbecause corporations can raise their prices without fear that competitors will draw away consumers. 

— Such corporate market power has also been a major force driving inflation. 

— Huge corporations also suppress wages, because workers have fewer employers from whom to get better jobs. 

— And corporate giants are also fueling massive flows of big money into politics (one of the major advantages of large size). 

Yet the federal courts have been reluctant to do anything about this and are pushing back against the Biden administration’s efforts. Why? Because of a man named Robert Bork. 

Let me explain. 

I first met Bork in September 1971, when I took his class on antitrust at Yale Law School. I recall him as a large, imposing man, with a red beard and a perpetual scowl. 

He was only in his mid-40s then, but he seemed impatient and bored with us (also in that class were Hillary Rodham and Bill Clinton). 

We kept challenging his view that the only legitimate purpose of antitrust law was to lower consumer prices.

“What about the political power of giant corporations?” we asked.

His retort: “How do you expect courts to measure political power?”

“But what about the power of big corporations to suppress wages?”

“Employees are always free to find better jobs.”

“What about their power to undercut potential rivals with lower prices?”

“Lower prices are good for consumers.”

“What about the sheer power that comes from their gigantic size?”

“Also good for consumers. Large size means lower costs through efficiencies of scale.”

Bork had an answer to each of our objections, but we were never satisfied. He spouted economic theory based on dubious “Chicago School” assumptions that all economic players have perfect information and face no cost of entering or leaving markets (Bork had attended the University of Chicago and its law school).

Even in our mid-20s, we knew this was bullshit. 

Bork refused to recognize power — even though antitrust laws emerged from the Gilded Age of the late 19th century, when a central concern was the untrammeled power of giant corporations.

A few years later, Bork wrote a book called The Antitrust Paradox that summarized his ideas. The staff of a conservative California governor bound for the White House read it and passed it along to their boss, and Bork’s book formed a basic tenet of Reaganomics.

Federal judges read it, too. Most judges didn’t (and still don’t) know much economics and hated getting bogged down in interminable and almost incomprehensible antitrust trials that could last for years. They found Bork’s simplicity and cogency helpful in limiting such lawsuits.

BORK’S INFLUENCE over the courts represented the culmination of years of work by the monied interests to kill off antitrust law. They’re still at it. 

Which is why the new view of antitrust now being pioneered by the Biden administration through the FTC and the Antitrust Division of the Justice Department is so important. 

This new view regards corporate concentration as a problem even if it provides economies of scale that might allow lower consumer prices in the short term. That’s because corporate concentration also means less innovation, more wage suppression, predatory behavior, price-push inflation, and increased political power.

Besides their lawsuits against Google and Amazon, the FTC and the Justice Department have proposed new merger guidelines to keep monopolies in check. Not surprisingly, giant corporations are doing whatever they can to stop these new protections from taking effect. 

The optimist in me thinks that as the public becomes more aware of the close connections among corporate power, predation, inflation, wage suppression, and political corruption, the new antitrust movement will eventually succeed. 

What do you think?

This article was published at Robert Reich’s Substack

Robert Reich

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, and writes at Reich served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good," which is available in bookstores now. He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

5 thoughts on “Robert Reich: Who’s Most Responsible For The Monopolization Of America? – OpEd

  • September 13, 2023 at 10:04 pm

    Change the political duopoly first then corporate monopolies will be much easier to topple.

    The world desperately needs the U.S. to move to some form of multi-party system.

    • September 14, 2023 at 3:16 am

      a 2 party system is twice as democratic as a one party system

      • September 14, 2023 at 6:55 pm

        Yes, with time, two party morphs into being effectively one party in winner-take-all, single member districts leading to total regulatory capture. This only strengthens the point of the need to move to multi-party asap. It’s not an option if you want to see a successful USA going forward.

  • September 14, 2023 at 2:45 am

    The monopolization of America, especially in recent decades, can be attributed to a mixture of economic policies, corporate strategies, and legal interpretations. While Robert Bork is a pivotal figure due to his influence on antitrust interpretation, several other individuals have been particularly influential in the various areas contributing to this trend. Here’s an attempt to identify some of these individuals:

    Historical Legislation:
    Thomas Edison: His aggressive patent strategies, particularly in the early days of the film and electricity industries, set precedents for how intellectual property could be used to corner markets.

    Mergers and Acquisitions:
    Jack Welch (former CEO of General Electric): Under his leadership, GE made numerous acquisitions, making it one of the world’s most valuable companies by market capitalization in the late 1990s.

    Technology Giants:
    Mark Zuckerberg (Meta/Facebook): His company’s acquisition strategies (buying potential rivals like Instagram and WhatsApp) have helped Facebook maintain its dominance.
    Jeff Bezos (Amazon): Through aggressive expansion and acquisition strategies (like the purchase of Whole Foods), Amazon has become an influential giant in multiple sectors.

    Financial Institutions:
    Jamie Dimon (JPMorgan Chase): As a leader in the financial industry, Dimon’s influence on mergers, acquisitions, and financing decisions has been significant.

    Lobbying and Political Contributions:
    Charles and David Koch: Through their financial contributions and political activism, the Koch brothers have influenced a range of policies favorable to big businesses.

    Sam Walton (Walmart): His aggressive global expansion strategies with Walmart have set standards for how retail businesses operate internationally.

    Individuals in the consumer food sector:
    Ray Kroc (McDonald’s): While Kroc didn’t start McDonald’s, he was instrumental in turning it into a global franchise giant. His emphasis on standardization and scale has left a lasting impact on the fast-food industry and influenced how other food corporations operate.

    Sam Walton (Walmart): Walmart, under Walton’s leadership, revolutionized grocery and general merchandise retailing. Walmart’s emphasis on low prices and efficient supply chains put enormous pressure on suppliers and competitors, leading to market consolidations.

    John Tyson (Tyson Foods): Tyson Foods has played a significant role in the consolidation of the meatpacking industry. Under the leadership of various members of the Tyson family, including John Tyson, the company became one of the largest meat processors in the world. Their business model influenced the poultry, beef, and pork sectors, driving consolidation.

    James Philip (Kraft Foods): Philip transformed a regional cheese distributor into a national dairy product corporation. Later mergers, such as Kraft’s merger with Heinz, further exemplify the consolidation trend in the food processing industry.

    Pierre S. du Pont (DuPont, now part of Corteva): While not directly in the food production sector, DuPont’s dominance in the seed and agricultural chemical sector has significantly impacted the food supply chain. The company’s influence on genetically modified organisms (GMOs) and seed patents has reshaped modern agriculture.

    Irene Rosenfeld (formerly of Kraft Foods and Mondelez International): Rosenfeld played pivotal roles in the mergers and acquisitions that shaped today’s food industry, including the Nabisco acquisition and the split of Kraft into two companies.


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